Sales of lithium batteries increase sharply net profit of blue lithium core in the first quarter increased more than 15 times compared with the same period last year.

On April 28th, Azure Lithium Core (002245) disclosed the first quarter 2021 report that the company's revenue in the first quarter of this year was about 1.463 billion yuan, up 115.25 percent from the same period last year; net profit was about 160 million yuan, up 1508.53 percent from the same period last year; and basic earnings per share was 0.1579 yuan, up 1463.37 percent from the same period last year.

Azure Lithium Core said that from January to March, the net profit of the owner of the company belonging to the parent company increased significantly, mainly due to the good performance of the company's various businesses, especially the excellent performance of the lithium battery business, which has become the company's largest source of profit, while the LED business has also achieved a turnaround.

According to the 2020 annual report disclosed by Azure Lithium Core, the company's operating income last year was about 4.234 billion yuan, an increase of 21.63 percent over the same period last year; net profit belonging to shareholders of listed companies was about 278 million yuan, an increase of 136.33 percent over the same period last year; and basic earnings per share was 0.2832 yuan, an increase of 136.2 percent over the same period last year. Of this total, the lithium battery business achieved an operating income of 1.447 billion yuan, an increase of 49.97% over the same period last year, and a net profit of 267 million yuan, an increase of 137.87% over the same period last year.

According to Huaan Securities, the European and American markets are the main force in the global power tools consumer market, with a number of large multinational companies accounting for the main supply share of the power tools market, and the global market is expected to reach US $41.7 billion in 2024. The transfer of business scope by overseas battery factories provides a good opportunity for domestic enterprises to expand overseas markets. With the improvement of the prosperity of the domestic downstream market, the shipment volume of lithium batteries for power tools has increased significantly. Domestic shipments are expected to reach 11GWH by 2025, with a compound growth rate of more than 20%.

Caixin Securities said that the blue lithium core power tool battery has a medium-term logic of "warming demand in Europe and the United States + domestic substitution". In terms of production capacity, the current production line is designed to have a daily production capacity of about 1.3 million, and it is expected that the annual production capacity of new lithium batteries will exceed 300 million. It is planned that Q3 will be released one after another in 2021, and it is expected that the annual production capacity will reach 700 million by the end of 2021. In terms of sales volume, the company sold 236 million battery products in 2020, and according to the company's plan, it is expected to achieve more than 70% growth in battery products in 2021, that is, sales of more than 400 million.

It is understood that Jiangsu Tianpeng Power Co., Ltd., a wholly-owned subsidiary of Azure Lithium Core, has continued to cultivate the small power application market based on power tools since its establishment in 2006, and has become the only domestic mainstream supplier to enter the supply chain of the four major international customers (TTI, Stanley, Pastoral and Bosch) at the same time. Benefiting from the increasing cordless penetration of tools year by year, superimposed by the continuous upward of the US real estate industry and the new infrastructure projects of the Biden government, the market demand is growing blowout, and the tight supply and demand state of the battery industry in 2022 is expected to continue, and the lack of production capacity has also affected the customer service and business development of the company's lithium battery business.

According to the development strategic plan of Ulan Lithium Core, the ternary cylindrical power lithium battery business, as a strategic industry focused on the main resources of the company, has also become the most important business to support the company's sustained and rapid growth. In order to solve the restriction of insufficient production capacity on the development of the company, the second phase of Tianpeng Power Plant started construction in 2020. The main body of the building has been capped in the first quarter of this year, and the project is progressing smoothly. It is expected that the project will be put into production smoothly in the fourth quarter of this year. After the project reaches production, the company's battery capacity will achieve an annual production capacity of 700 million cylindrical batteries. In addition, the company also announced a number of lithium battery investment projects in the first quarter of this year.

On February 8th, Azure Lithium Core plans to invest more than 1.2 billion yuan in the lithium battery project, with an estimated investment of 1.256 billion yuan, an additional annual production capacity of 1 billion AH lithium-ion batteries, and an annual production capacity of more than 300 million lithium batteries. After the completion of the project, the wholly-owned subsidiary Tianpeng Power supply will have an annual capacity of 700 million lithium batteries.

On the evening of March 4, Azure Lithium Core announced that on March 3, 2021, the company signed the "Investment Agreement for Tianpeng Lithium Energy industrialization Project" in Huaian City, Jiangsu Province, with the people's Government of Qingjiangpu District, Huaian City, and the Management Committee of Jiangsu Huaian Qinghe Economic Development Zone. It is proposed to invest in the construction of a high-efficiency new lithium-ion battery industrialization project in Huaian Qinghe Economic Development Zone, with a total investment of 5 billion yuan. Build a new 4 billion AH cylindrical lithium battery industrialization project.

On the evening of March 5, Azure Lithium Core disclosed the fixed increase plan, and the total amount of funds raised in this issue did not exceed 1.5 billion yuan. Among them, the blue lithium core real controller CHENKAI or its control of the main commitment, the subscription amount in this increase is not less than 40 million yuan, not more than 150 million yuan. After deducting the issuance expenses, the funds raised in this issue are intended to be used for the expansion project of new lithium-ion battery with an annual output of 1 billion AH with high safety, long life and high energy density and the industrialization project of high-efficiency new lithium-ion battery with an annual output of 2 billion AH.